The national economy grew by approximately 3 percent during all of 1989. However, a significant decline in the pace of activity took place during the last quarter of 1989. For the 1st quarter of 1990 real GNP growth followed this trend with a modest 2.2 percent increase, Table 1. Many analysts are forecasting a rather weak year in 1990 with growth averaging only about 2.0 percent for the year. Other statistics which suggest that the national economy is poking along include data on industrial production and interest rates. Even with slow growth in the economy, inflation, as measured by the CPI, increased by approximately 6.3 percent from March of 1989. This is a very disturbing development and may require stronger action on the part of the Federal Reserve if the price level is to be held in check.
 

     The unemployment rate in Central Wisconsin and its three counties fell dramatically from last year's levels. A similar phenomenon occurred for the state. The rates registered in the local area represented record lows for the decade.
 

     Employment in the region was virtually unchanged from a year ago. As of March 1990 there were approximately 126.8 thousand people employed in the three‑county area compared to 127.4 thousand last year. Only Marathon County experienced any new job generation. Given the inter-linkages of the area, this was a positive sign for the region.
 

     Nonfarm employment in the region fared better than total employment by posting a solid 4.7 percent gain from last year. Manufacturing and service employment paced the expansion by adding 1.2 and 1.7 thousand jobs respectively. Nonfarm employment in the three county area reached approximately 115.4 thousand during March.
 

     Key Central Wisconsin industries continued the steady growth pattern established several years ago. The reported decline in finance, insurance, and real estate may be due to a statistical aberration rather than to economic causes. Further monitoring of this situation by the CWERB will be required. In sum, activity in the key sectors bodes well for the remainder of our regional economy.
 

     Regional business leaders believe that the national economy has weakened and that the local scene is unchanged from their perspective. However, this group is quite optimistic about the future prospects of their particular industries and believes that a noticeable expansion may be in the forecast.
 

     The Marshfield area economy had a rather successful first quarter 1990 according to several local indicators. The unemployment rate dropped dramatically from a year ago and the Marshfield employment index suggests that local payrolls have increased by approximately 4 percent. However, there were other signs that the local economy, like the national economy, has experienced somewhat of a slowdown in various areas of economic performance. Examples would include residential construction and help wanted advertising. This information presents a mixed picture of performance and makes future prognostication difficult.
 

     The national economy continues to avoid a wide recession and set records for the length of a peace‑time expansion. The last recession ended around December 1982. Only the war years of the 1960s surpassed this achievement. However, the national economy faces many serious interrelated challenges in the years ahead such as inflation, and the trade and budget deficits. These issues and how they are addressed will influence the country's standard of living and political prominence for generations to come.